Nowadays, the big buzzwords in business analytics are insights topped with actionable insights. These used and sometimes abused words have become a must have and must do in every large or small business that has an analytics organization. However, their meaning and use are as varied and widespread as the businesses that proudly promote them. As some business leaders got intoxicated with looking for and feel in dire need of business insights by any means, others would seek them at any cost, then dream up the associated actions and decisions to use in the hope of reaching the dream land of significant competitive advantage without the recourse to a sound "Insight-to-Action" strategy . This situations looks like a repeat of yesteryears management science and quantitative analysis rollercoaster that flourished during the years of plenty, then vanished in the ensuing droughts. It seems like the more things change, the more they stay the same, or do they? A wake up call and a light at the end of this windy path is badly needed, but has possibly arrived with Mr. Taymour Matin's "From Insights to Action Becoming Data-Driven, Not Driven by Data (Right Brain Analytics Book 1)" to the rescue.
In this stimulating and superbly written paper, Mr. Matin has cleared the way to developing the rightly valuable business insights, through the right mix of data analysis and business intuition, as well as the associated efficient actions that are most likely to improve business performance in order to maximize the chances of reaching the desired business goals and achieving a competitive advantage in the market place.
The proposed recipe for the best data and intuition-driven insights, prescribes putting in place the technological, strategical, professional and managerial processes aligned with the required structures in order to enable the identification of the most beneficial insights and actions that will lead to the best outcomes and the best ROI possible. These steps from Insights to Action are well explained and illustrated through easy to understand charts and business examples in this paper.
In order for insights to improve business performance, the author argues that an organization must first understand the nature of insights in order to distinguish between those that are actionable and those that are not. Armed with this understanding, the organization can then proceed to build data-driven processes that identify and make use of actionable insights that would impact fundamental company performance outcomes. Moreover, not all actionable insights are "created" equal" and should be evaluated on two important criteria.
First, Actionability vs. Traceability as depicted in figure 1 below, and second, on their Risk/Return score as illustrated in figure 2.
Figure 1: Traceability vs. Actionability (Traceable to Primary Objective)
Actionability is necessary because an insight can be defined as using knowledge to affect an outcome. However, while actionability of an insight is necessary, it is not sufficient; If the awareness levels are not traceable to the primary objective (e.g. the impact of increasing awareness through promotion cannot been correlated with a corresponding impact on sales), the effort is built on blind faith as represented by quadrant (B) in Figure 1 above. Therefore, only "Star" insights should be considered and further evaluated on a second criteria of Risk/Return.
Second: Risk vs. Return: Even if an insight is a "Star" on the Actionability/Traceability chart, care should be taken to prioritize the pursuit of actionable insights according to their respective Risk/Return score as illustrated in figure 2 below.
This capacity of leveraging data-driven insights must also be created with the full realization of the importance of team work, group dynamics and collaborative relationships.
To complicate matters even further, the above data/analytics based methodology is often pitted against business intuition approach which are often viewed as competing opposites. However, rather than viewing analytics and intuition as diametrically opposed approaches, a way must be devised to have the two work together synergistically. In this sense, "analytics can be thought of as the barge, while intuition is the tugboat that nudges the enterprise in the right direction".
If correctly executed, the application of Mr. Matin's own insights on how and what the challenges are to go from relevant insights to competitively advantageous actions, would provide the ever sought after formula to sustainable analytics practices which will then enable analytics groups and businesses to prosper and endure in good times as well as bad times. Business leaders as well as analytics practitioners alike should then be able to operationalize a sustainable survival in this era of big data,/high tech intense competition.